Published at:13th May 2026, 1:44 pm Overview India doubled platinum import duties to 15.4%, escalating costs for vehicles reliant on catalytic converters, particularly diesel SUVs and strong hybrids. This move, aimed at forex conservation, is expected to increase car prices and may accelerate the shift toward battery electric vehicles as automakers seek to mitigate rising input expenses. Duty Hike Increases Vehicle Costs India's decision to more than double its import duty on platinum, from 6.4% to 15.4%, is set to significantly increase costs for the domestic auto industry. This policy, aimed at conserving foreign exchange reserves amid geopolitical instability in West Asia, directly impacts the supply chain for internal combustion engine (ICE) vehicles, particularly their emission control systems. The move is expected to raise production costs, hitting vehicle segments that use more platinum in their catalytic converters the hardest, such as diesel sport utility vehicles (SUVs) and strong hybrid models. Market Reaction and Stock Divergence Investor reaction was mixed. Some component suppliers saw their shares decline, with Sharda Motor Industries dropping 2.1% to INR 950. In contrast, larger automakers like Tata Motors and Maruti Suzuki saw modest gains, rising 1.2% to INR 1250 and 1.5% to INR 13000. Analysts noted that companies like Maruti Suzuki (P/E 35, market cap ~$35 billion) are better positioned to pass on input costs than smaller suppliers. Tata Motors (market cap ~$20 billion, P/E 28) faces higher direct costs due to its significant diesel SUV range, while Mahindra & Mahindra (market cap ~$25 billion, P/E 32) is also exposed through its diesel-heavy offerings. Estimating Price Hikes and Emission Compliance Costs The increased duty increases the cost of meeting BS-VI emission standards. Industry estimates suggest potential price increases ranging from ₹2,500–₹4,000 for entry-level petrol cars, ₹8,000–₹12,000 for mid-size diesel SUVs, and ₹12,000–₹18,000 for strong hybrids. These figures reflect higher platinum-group metal loading, from 2-4 grams in petrol cars to 6-10 grams in diesel SUVs and 10-15 grams in hybrids. Component manufacturers such as Bosch India (P/E 45, market cap ~$12 billion) and Tenneco (P/E 15, market cap ~$3 billion) will likely face contract renegotiations, as most agreements include commodity pass-through clauses. Past duty adjustments in 2023 led to 3-5% price hikes for affected vehicles and temporary stock declines for OEMs, a pattern that could repeat if automakers cannot fully pass on costs. The Indian auto sector, which reported 8-10% year-over-year volume growth in Q1 2026, now faces added margin pressure on top of existing commodity and currency challenges. Global platinum prices have recently traded between $950-$1050 per ounce, influenced by industrial demand and global events. Risks for Automakers and EV Competition The higher import duty poses a significant risk for automakers and component suppliers heavily reliant on platinum-based catalytic converters. Companies with large portfolios of diesel SUVs and strong hybrids, including Ashok Leyland (P/E 22, market cap ~$7 billion) and Toyota Kirloskar Motor (a subsidiary of Toyota Motor Corp), face direct cost increases. This duty burden worsens their competitive position against battery electric vehicle (BEV) makers. While Tata Motors is investing in its EV division, its existing ICE operations are now less cost-competitive. Component suppliers like Sharda Motor Industries (P/E 19, market cap ~$1.5 billion) may struggle to absorb rising costs without affecting order volumes as OEMs seek to keep consumer prices stable. Previous supply chain issues have also highlighted the risks of relying on specific imported materials. Recent analysis of Q4 FY26 filings from most Indian OEMs showed strong demand but also noted existing supply chain cost pressures, suggesting limited room for absorbing further increases without impacting profitability or market share. Mitigating Costs and Shifting to EVs Automakers are exploring ways to manage these rising costs. Strategies include accelerating R&D to reduce platinum loading in catalytic converters and expanding precious metal recycling. The government's concessional duty of 4.35% on imported spent catalysts for recovery offers a pathway for recycling the metal. Analysts believe this could slightly improve the cost competitiveness of BEVs, which do not use catalytic converters. Platinum's growing importance in emerging technologies like hydrogen fuel cells and electrolysers may also lead to strategic reviews of its domestic availability and pricing. Source： https://www.whalesbook.com/news/English/auto/Indias-Platinum-Duty-Hike-Squeezes-ICE-Vehicle-Costs

[Toyota and Honda Both Saw Sharp Declines in China Sales, January-April] From January to April this year, Toyota's cumulative sales in China fell 10% YoY to 477,100 units; Honda's cumulative sales in China over the same period plunged 28% YoY to 145,065 units.

[Toyota's April Sales in China Fell 25% YoY] Toyota's April sales in China fell 25% YoY to 106,500 units. Affected by geopolitical tensions driving up international oil prices, Toyota's internal combustion engine vehicle sales declined significantly. In addition, many consumers chose to delay their car purchase plans to wait for Labour Day holiday promotional events. FAW Toyota, Toyota's joint venture with China FAW Group, saw April sales drop 38% YoY to 40,000 units, while GAC Toyota, its joint venture with GAC Group, saw sales decline 10% YoY to 54,100 units. Toyota's luxury brand Lexus saw sales fall 29% YoY, selling only 11,200 units. In contrast, Toyota's EV sales in China performed strongly, surging 88% YoY to 17,700 units.

[Toyota to Build Third Plant in India to Produce New SUV] Toyota Motor Corporation will build a third vehicle assembly plant in India to meet growing local market demand and boost exports to neighboring countries. The world's largest automaker announced on May 11 that the new plant will create approximately 2,800 jobs and will be located in an industrial park in the state of Maharashtra, India, more than 300 kilometers (approximately 186 miles) inland from Mumbai. Toyota plans to begin production of a new SUV, whose specific model has not yet been disclosed, at the plant in H1 2029 together with its local Indian partner, with an initial annual capacity of 100,000 units.

In April 2026, the national consumer price index (CPI) rose 1.2% YoY. Among them, urban areas rose 1.2% and rural areas rose 1.0%; food prices fell 1.6% and non-food prices rose 1.8%; consumer goods prices rose 1.4% and service prices rose 0.9%. On average from January to April, the national CPI rose 0.9% compared with the same period of the previous year.

[Toyota Expects Hybrid Sales to Exceed 5 Million Units for the First Time This Fiscal Year] Toyota Motor Corporation recently projected that it would sell 5.07 million hybrid car models in the fiscal year ending March 2027, up 9.8% YoY, with hybrid sales potentially surpassing the 5 million-unit milestone for the first time. Sales of all electrified car models, including hybrids, battery electric vehicles, and plug-in hybrids, are expected to reach 5.95 million units, accounting for 56.7% of the overall sales target.

[Toyota's Q1 Operating Profit Plunged Nearly 50%] Toyota Motor Corporation recently reported that, impacted by tariffs and rising shipping costs, its operating profit in the quarter ended March fell from 1.1 trillion yen in the same period last year to 569.4 billion yen, a YoY plunge of 49%, hitting the lowest quarterly profit in over three years. Revenue for the same period was 12.6 trillion yen, edging up nearly 2% YoY.

Toyota said on Monday that it would build a new plant with a designed annual capacity of 100,000 units in Maharashtra, India, and the plant is expected to commence production in H1 2029. The Japanese automaker noted in a statement that the plant would be located in the local Bidkin Industrial Area, primarily responsible for producing a brand-new SUV car model, and is expected to create approximately 2,800 jobs locally.

[Toyota Plans to Build Three New Plants in India, with Annual Capacity to Increase to 1 Million Units] Toyota Motor plans to build three vehicle assembly plants in India. After 2030, its annual capacity in India will triple to 1 million units. Toyota's new plants in India will also serve as export hubs, supplying products to the Indian domestic market as well as the Middle East and African markets. The three new plants will be located in western Maharashtra, India. The first plant will begin production in 2029, and the other two plan to come online successively after 2030, with a total investment of approximately 300 billion yen (approximately $1.9 billion).

Approaching major holidays and the summer travel peak, Toyota has launched significant registration tax subsidies in Vietnam to attract ride-hailing drivers for vehicle replacements. Toyota is offering up to a 100% tax discount on key models like the Veloz Cross and Avanza Premio, plus a complimentary one-year body insurance, with a total value of up to 75 million VND. Additionally, the Vios and Yaris Cross receive a 50% tax subsidy, backed by zero-interest loans for the first year from Toyota Financial Services.